Author: hilarychu

The first lesson we learn in business school is that firms are established to generate profit. If that is the case, why are so many corporations incorperating sustainability into their business model?

Branding helps generate profits through increased sales and customer loyalty. Company image is an important part of the brandname too. Consumers support brands that they like and believe in. Consumers are paying to  support the comapny and sustain what this company represents. As said in class, a brand is the promise that a company makes to its customers.

I have learnt that the goal of business is to make the most profits, through defeating competition, through various tactics and long term strategies. However, after learning about social entrepreneurship, it seems more like those are the by-products of a successful business. Social entrepreneurship aims to promote the well-being of others while developing a company like a traditional business would. A successful business should aim to make a positive change to its surroundings, including to the society and to its workers.

Mark Zuckerburg is known for creating the widely known and widely used social networking site Facebook. I consider him as the true entrepreneur since he has produced a brand new product that has changed the way people connect. Facebook is not only about getting updates from friends, but also to know more about acquaintances. It has created a new source of entertainment as well, with people sharing interesting happenings of their lives or even just funny jokes. It has reached a huge market, that no other social networking site has ever been able to achieve. It is almost a new way of how people communicate forming a new organization. His idea is ground breaking, containing immense innovation.

This has created huge profits for facebook, in a short amount of time. It has earned $355 million in net income in the first nine months of 2010. According to a document distributed by Goldman Sachs, facebook has attracted so many investors this year that it will have to disclose financial data similar to a publicly traded company by April 2012. However, we have to look at the risks of introducing such a brand new idea that Zuckerburg has taken, before the now high value of this entrepreneurial venture.

The recent rally in share prices have driven investors to think whether this is a sign of the global economy recovering. However, it is clearly shown that a number of indicators point towards global trade continuing to decelerate and that the real sector of the economy really hasn’t been improving. Indicators from the real sector of the global economy are still not rising despite the upturn of share prices.

This suggests that the rebound in equities was really not supported by the improvements in global business cycle conditions. Hence, this casts doubt onto the sustainability of the market turnaround, probably only fueled by swings in investor sentiments.

Questions arise about whether ECB will carry out monetization. However, given the current seriousness of the debt crisis, it is doubtful that monetization could be a long term solution.

Given current figures, it is likely that the European market is already contracting.

Funds are becoming more and more expensive as European banks continue to carry out aggressive deleveraging. As financing becomes difficult in Europe, it is likely to give a hit to the growth global economy.

Divergence in US consumption and imports. Us imports have contracted although retail sales has been sustaining. In the long run, this cannot last. Sooner or later, inventories will fall in US and consumers will have to switch to imported goods, raw or finished.

US consumer disposable income has been bad. The only support in the resilience in spending is only due to the falling of savings rate. But as we all know, given the already low US savings rate, it is questionable how much and how long US consumers can sustain.

Chinese regulators are enforcing regulations for chinese banks to move their off-balance sheets assets onto their balance sheets by the end of the year. This curbs their lending capabilities hugely. Also, liquidity tensions in the chinese interbank market would also be intensified. Hence, certain banks might still be tight in their liquidity.

Tightened lending conditions will have a great effect on Chinese import volumes, pushing it to continue declining. This pull back in economic activity in china due to lack of funds will greatly overshadow the recovery of the global economy given China’s important position and significant presence. This will have a even bigger effect in raw materials and industrial goods markets, in which these sectors are bound to relapse.

In conclusion, China’s credit growth, as well as import demand is at risk of decelerating.

Following Steve Jobs death, there has been a lot of concerns regarding Apple, including loss of customer loyalty, loss of innovation in new products, leading to speculation in its stock prices. As highlighted in Evangeline’s blog, analysts worry that without the creative marketing genius of Steve Jobs, the company will degenerate in the long term.

However, I think apple has already successfully established it’s brand image in the heart of consumers. It is considered fashionable, user friendly and very original. As discussed in class it’s branding is extremely successful as it has already created a first in the smart product market. It is the first to provide products that combine all the above attributes. It’s innovation has made it’s products one after another desirable by consumers. It is extremely successful in implementing the differentiation strategy according to Porter’s generic strategies.

Also, in the later years of Steve jobs life, he had minimal involvement in apple, and had set up a organizational structure for apple’s smooth operation.

In conclusion, Apple has very high customer loyalty, not just to Steve Jobs but to apple as a brand. With its organizational structure, it will be able to continue running smoothly.

Marketing is not always as straightforward as it seems. As inspired by Claudia’s post, in which patagonia’s campaign features the concept of minimal purchases. It is indeed a focus on the high quality products that the company produces, making consumers want to buy more.

Companies are making use of the swinging sentiments of consumers to gain profits. However, the campaign has effecitvely positioned its products through creating a good perception of the brand held by consumers. At the same time,its marketing campain has highlighted the most important attributes in its products.

This is a demonstation of innovation in marketing.

More and more companies are trying their best to utilizie MIS and BTM through capitalizing on the fact that technology is huge right now. In a recent article, the Hiegeelkes has created a Facebook app called Second Porch that keeps short term renting dealings between friends, for increased security. Users post their property availability, and the listings only appear in their friends’ news feeds. Friends can also comment and make recommendations about the properties and even prospective tenants.

This new business has been formed purely through utilising MIS and BTM. It has actually integrated the both very successfully, using the information collected from the MIS as the greatest resource in the BTM.

This is a very successful demonstation of entrepreneurship through utlising IT.  It has achieved productivity, since it is low cost and does not require a lot of resources. Due to such innovation, it has a competitive advantage . It has put a brand new approach to facebook, transforming it from a pure social medium to a strong business platform.

Most brand name drugs and are priced extremely high although its manufacturing costs are very low, making it inaccessible to the impoverished. Pharmaceutical firms have monopoly power as their products are protected by patent, hence allowing them to have a high profit margin.

Currently, developing countries cannot afford drugs with its expensive price. Ethically, it is a basic human right to have access to basic goods. They should be available to the general public and those that are impoverished.

According to Friedman’s theory, the only social responsibility business is to earn profits given that they follow the law and basic ethical customs. If not, the corporations would be taking the function of a government through indirectly imposing taxes. They might not have the best knowledge or information to decide on the degree of the regulations.

Looking into Stake holder’s theory, companies should take into consideration the needs of not only stockholders but also Employees and Managers, Customers, Suppliers and the Host community in order for the business to succeed. But in the case of pharmaceuticals, I have to say it really doesn’t matter since it has monopoly power and people have no choice but to purchase from them.

In this case, the argument is two fold the pharmaceutical industry is important because it is a major source of medical innovation. Research is extremely pricey and it is through the prices of these drugs that companies are willing to take the risk to fund such researches.